Stockbridge v. Franklin Bank

Bryan, J., delivered the opinion of the Court. The Franklin Bank of Baltimore obtained a judgment against Harrison Hopper, and caused an attachment to be issued thereon. The attachment was laid in the hands of Stockbridge and Musselman, executors of Albertson, deceased; and also in the hands of Henry W. Fox. This appeal does not concern the attachment against Fox. The executors of Albertson pleaded nulla bona; issue was joined and verdict and judgment rendered against the garnishees. The garnishees have appealed. It appeared that Harrison Hopper was entitled to a distributive share of the real and personal estate of Isaac Albertson, deceased, under his will; and that since the attachment was laid the executors had passed administration accounts in the Orphans’ Court which showed that they retained in their hands as part of Hopper’s distributive share a sum of money more than sufficient to pay the judgment in favor of the Franklin Bank. It also appeared that nearly a year before the issuing of the attachment Hopper executed and delivered to Fox the following paper : “ Baltimore, March 28, ’95. “For value received, I hereby assign to Henry W. Fox all my right, title and interest under the will of Isaac Albertson, late of the city of Baltimore, and in and to the estate of said deceased. Harrison Hopper, (Seal).” “Witness: Chas. J. Fox.” It was acknowledged and recorded among the land records of Baltimore City within four days after its date. A certified copy of the paper under the seal of the Clerk of the Superior Court was offered in evidence ; and the original paper was also produced and proved. One of the executors and garnishees testified that he and his co-executor were informed of this paper before it was recorded ; and that they had acted upon it, and had paid out large sums of money to Mr. Fox; and that they considered it to be a good and valid assignment. It was also in evidence that at the time the above [199] paper was executed and delivered to Fox, he executed and delivered to Hopper a receipt in the following terms : “ Received of Harrison Hopper an assignment of his interest in the will of Isaac Albertson, late of Baltimore City ; the proceeds of the same to be paid as follows, viz : (Here follows a. list of debts amounting to more than sixteen thousand dollars). Balance to be paid as may be directed by Harrison Hopper.” And also that by written agreement under seal among themselves the creditors changed the order in which the debts were to be paid. And also that Fox had paid more than six thousand dollars in discharge of these debts ; and also that the debts mentioned in the receipt were really and in good faith due by Hopper to the creditors therein named. The Court instructed the jury that the assignment from Hopper to Fox was fraudulent in law and invalid as against the plaintiff, and that the garnishees could not rely upon it to prevent a j udgment against them. It was not necessary to record the assignment from Hopper to Fox, to make it operative to convey the money in the hands of the executors. No real estate is in question in this case; and we have therefore no concern with it, nor with the effect of the recording respecting it. In Glenn v. Grover, 3 Md. 223, it was said to be well-settled that a debtor in failing circumstances might prefer one creditor to another by a transfer of his property made in good faith ; and that it was equally clear that if such a transaction should be assailed on the ground of fraud, that the onus of proof would be on the party impeaching the assignment. This was a statement of a doctrine which had been declared in Hickley v. Farmers’ and Merchants’ Bank, 5 Gill & Johnson, 378, and which has been stated to be the law of Maryland in a great number of other cases. It has been settled ever since Sangston v. Gaither, 3 Maryland, 40, that an assignment for the benefit of creditors, exacting releases, must transfer all the debtor’s estate; and that consequently a reservation to the debtor of the surplus after paying preferred creditors will avoid the deed. It is the exaction of [200] releases which is fatal to the deed. This is necessarily implied from the decided cases, even where it is not declared in express terms. It has been expressly held that a deed of trust, which does not exact releases, is not void merely because it does not convey all the grantor’s property. Hoopes v. Knell, 31 Md. 550; Price v. Deford, 18 Md. 489. And in Fouke v. Fleming, 13 Md. 392, it was held that a deed, which conveyed certain specified articles of personal property to a trustee with power to sell the same, and to pay certain specified debts from the proceeds, and to pay the residue to the grantor, wa's not impeachable because of the reservation of the surplus. There was no evidence tending to show that the assignment to Fox was fraudulent in fact. The judgment must be reversed without a new trial, unless there is some question upon which the appellee might recover if the case should be tried a second time. An exception taken by the plaintiff appears in the transcript of the record. As the plaintiff took no appeal, the exception is not properly before us. There are special provisions in the local laws which require us to entertain and decide such exceptions. These are applicable only to the counties named in them ; for instance Baltimore and Frederick Counties. As the question, however, appears in the case, we will consider it for the purpose of deciding whether there ought to be a new trial. It is insisted that the assignment to Fox was not admissible in the evidence under the pleadings in the case. The plea was nulla bona, on which issue was joined. Under this issue it was competent for the garnishees to prove that they had no property of the defendant in their hands at the time of the laying of the attachment, or at the time of the trial or at any intervening time. And they had a right to offer the assignment in evidence for the purpose of showing that before the attachment was laid the title to the assets in their hands had been validly conveyed to Fox, and that therefore they did not belong to the defendant. The evidence [201] was admitted in accordance with the well established practice. (Decided June 23rd, 1897). Judgment reversed without a new trial.